Creating new jobs amid evolving tech key

The relationship between technological change and employment expansion is an old topic, yet one that has not lessened in importance over time. When disruptive technological revolutions occur, whether job creation can ultimately outweigh job destruction remains an unresolved puzzle in economic theory.

Fundamentally, the shock that technological change brings to employment is not that occupations, positions and jobs are only destroyed and never created. The real problem is that job creation and job destruction are often misaligned across space, uneven across time, unequal in scale, and mismatched in terms of skills supply and demand.

Looking back at economic history, these asymmetries have haunted generation after generation of workers like a recurring curse ever since the First Industrial Revolution. Therefore, in an era of rapid artificial intelligence development, the key to ensuring that job creation outpaces job destruction lies in achieving better alignment between the two in terms of timing, geography, scale and skills.

New ways of thinking

To better understand the creative and destructive forces that AI may unleash, we should first look at what is already happening in the labor market.

Many economists believe China's economy has crossed the so-called Lewis Turning Point and machines and robots accelerate the replacement of human labor. The pace of job destruction increases significantly and the number of lost positions rises sharply.

A Lewis Turning Point occurs when a country's surplus labor evaporates, pushing up wages, consumption and inflation rates.

Based on official data estimates, China's urban labor market created a cumulative 154 million new jobs between 2013 and 2024. But not all of them translated into net employment gains. During the same period, cumulative job losses reached 53.62 million.

On the one hand, the spread of AI is expected to amplify this destructive effect on employment. On the other hand, it may also create the possibility for job creation to surpass job destruction.

This places much higher demands on policymakers. In line with an employment first strategy, technological innovation and employment expansion must be made as compatible as possible. At the same time, gains in labor productivity must be transformed into new opportunities, strengthening both the scale and the momentum of job creation.

If we break free from traditional frameworks of understanding and conventional development models, technology aimed at raising labor productivity does not necessarily lead to a net decline in jobs. On the contrary, rising productivity can itself become the catalyst for entirely new employment space.

Create new jobs

In reality, many new occupations do not suddenly appear out of thin air overnight. They have often existed quietly, existing within economic activity for years. But because the market remained too small, the number of jobs they created was negligible.

Only when labor productivity rises dramatically, and when the benefits of that productivity are broadly shared across the society, do more people become consumers of the products and services tied to those occupations. At that point, new professions and new jobs begin to emerge on a meaningful scale.

For decades, neoliberal economics tried to convince people that productivity gains achieved by a handful of large corporations would naturally spill over into society and benefit broader populations — a variation of so-called trickle down economics. Yet the experiences of both developing and developed countries show that this phenomenon is not really effective or beneficial for the society at large.

The lesson here is clear: new occupations, new positions and new forms of employment do not emerge automatically.

Only through a fundamental shift in how we think about development can the immense power, scale, and potential of AI driven productivity gains be turned into broad employment growth. That means starting with a fairer distribution of productivity dividends and tackling structural contradictions in the labor market.

Only then can job creation grow faster and larger than job destruction, breaking what has long been the "century-long curse" of asymmetry between the two.

Breaking century-long asymmetry

Several areas should become central priorities for policy expansion and intervention.

First, while improving the social security system and labor market institutions, governments must significantly strengthen public employment services and make related systems more adaptable to the times and more targeted in their policy tools.

Under the growing penetration and disruption of AI, labor markets will inevitably become more uncertain and more volatile. This is the natural response to the creative destruction brought by disruptive technological change.

Yet one principle must remain clear: people themselves, as the agents of labor, must not become the casualties. Human well being must not be weakened in the slightest.

After all, allowing everyone to share the gains of rising labor productivity is not only an inherent part of technological progress, but increasingly its defining purpose.

This means social security systems must provide more universal and equal welfare protections. Labor market institutions must defend workers' rights to a higher degree. Public employment services must help workers transition into new roles with greater intensity and frequency.

The structural contradictions are already present in the labor market and likely to worsen under AI, meaning job vacancy rates and unemployment rates may rise at the same time.

As a result, public employment services centered around training cannot merely keep pace with changes. They must anticipate trends and changes, and stay one step ahead of them.

Judging from the share of urban workers currently receiving subsidized vocational training, investment still does not match the upward trend in urban unemployment. More public resources should be committed on a long term and normalized basis, making employment training one of the essential public services of the artificial intelligence era.

Second, on the basis of fairly redistributing gains from rising productivity, the society must redefine occupations, positions and work itself, while promoting social mobility and broader human development.

As labor productivity rises sharply and the constraints created by resource scarcity gradually weaken, social wealth will become far more abundant. Under such conditions, the creation of occupations and jobs will no longer be strictly limited by the size of consumer markets, and workers' incomes will no longer necessarily remain tightly linked to productivity alone.

From this perspective, the principles governing the distribution of economic output and social wealth may gradually shift away from a strict "payment according to work" model toward one increasingly shaped by the idea of "meeting people's needs".

Such a transformation is not only an inherent requirement of Chinese modernization. It is also a fundamental path toward addressing the employment shocks brought by AI.

Finally, when it comes to sharing productivity gains and responding to the impact of AI, the most effective institutional tool comes from both the lessons of economic history and the urgent demands of reality: significantly expanding redistribution, so that a growing share of people's livelihoods and well being comes from redistribution, especially through basic public services.

The writer is a member of the Academic Division of the Chinese Academy of Social Sciences.

The views do not necessarily reflect those of China Daily.